Lobster Tails in the Desert

The contracting scandals in Iraq have reached chicken wings and egg rolls. The Wall Street Journal recently reported that the Justice Department is investigating “whether the food companies set excessively high prices when they sold their goods to the Army’s primary food contractor.”

The companies in this food-industrial complex include Sara Lee, ConAgra Foods, Perdue Farms, and Quantum Foods, a meat packer. Their contractor, a Kuwaiti company called Public Warehousing Company, is reimbursed by the government for the cost of the food it distributes. But as the Wall Street Journal writes, “Unless adequate safeguards are in place, the supplier and the maker have an incentive to inflate the cost and share the extra profits among themselves.” That safeguards part appears to be the problem. For example, court records show that Sara Lee, after being paid, kicked back 5 percent of the cost of its goods to Public Warehousing.

This is a story with splendid, if unlikely, sentences, like: “A key figure in the probe is David Staples, a top procurement official at the Army who formerly worked at Sara Lee’s Jimmy Dean sausage unit.” (Staples works for an agency called Army Center for Excellence, Subsistence. Seriously.) It appears that Staples required contractors like Public Warehousing to purchase food from specific companies (like, say, Sara Lee) instead of through open bidding. In fact, Tyson, the Big Bird of chicken producers, has complained that it has been shut out of Iraq entirely. The Journal isn’t hedging its sentences on this. For example:

Since 2003, the Army agency has issued guidelines directing that chicken breast, turkey breast, ham and sausage consumed by U.S. forces in Iraq and Kuwait be supplied by Sara Lee.